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What is the price of the combined test assuming

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Reference no: EM13493176

Allied Laboratories is combining some of its most common tests into one-price packages. One such package will contain three tests that have the following variable costs:
Test ATest BTest C
Disposable syringe$3.00$3.00$3.00
Blood vial0.500.500.50
Forms0.150.150.15
Reagents0.800.601.20
Sterile bandage0.100.100.10
Breakage/losses0.050.050.05

When the tests are combined, only one syringe, form, and sterile ban­dage will be used. Furthermore, only one charge for breakage/losseswill apply. Two blood vials are required, and reagent costs will remainthe same (reagents from all three tests are required).

As a starting point, what is the price of the combined test assuming marginal cost pricing?

Assume that Allied wants a contribution margin of $10 per test. What price must be set to achieve this goal?

Allied estimates that 2,000 of the combined tests will be conduct­ed during the first year. The annual allocation of direct fixed and overhead costs total $40,000. What price must be set to cover full costs? What price must be set to produce a profit of $20,000 on thecombined test?

 

Reference no: EM13493176

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